“I didn’t expect such a lack of professionalism”

Since when can we say that the Vatican is no longer a tax haven?

Since 2015, when it signed a tax information sharing agreement with the Italian Republic and the United States. Previously, the Vatican was on the gray list, not far from the blacklist of tax havens. The lack of tax transparency was one of its major problems. Since tax authorities in many countries did not have access to Vatican banking information, owners of an account with the Holy See could refrain from declaring it, even though it was prohibited. In France, for example, you can no longer do this with Switzerland and Luxembourg: these countries have been sharing their banking information with the French tax authorities for several years. The tax authorities would automatically find you.

Why is it especially important for the Holy See to share tax information with Italy and the United States?

It’s simple: 80% of our customers live in Italy. Almost all religious congregations have an account with the Institute for Works of Religion (IOR) and have their mother house in Italy. It was also important to establish an agreement with the United States, because this country has the particularity of taxing its expatriates, regardless of their country of residence. The French are not very important clients of the IOR. There are a few accounts of French congregations or dioceses, such as those of Paris or Marseille. When the bishop of Paris or Marseille goes to Rome, he can use this account for his expenses. These are small accounts. But we very strongly encourage them to declare themselves to the French tax authorities.

You declared to The Cross that the IOR was allegedly “looted” by nearly 150 million euros between 2004 and 2014. Is this due to the dishonesty or incompetence of those responsible at the time?

I would say both. Former bank president (Angelo Caloia, Editor’s note) was found guilty of embezzling funds to the detriment of the IOR in a real estate transaction. The former general manager and his deputy (Paolo Cipriani and Massimo Tulli, Editor’s note) were also convicted. Pope Francis once pointed out that there were two types of corruption: financial corruption, but also intellectual corruption, when we commit crimes not to obtain money, but power. It was often power that attracted convicted Vatican employees.

There was also incompetence on the part of some supervisory authorities. There was no control or reporting system or means to put an end to these actions. This is no longer the case today.

According to Italian journalist Gianluigi Nuzzi, several cardinals had bank accounts at the IOR showing seven-figure sums in 2014. When Pope Francis found out, he reportedly became angry and demanded their immediate closure. Is this true?

A cardinal had a lot of money. I won’t tell you any more. But nothing prohibited him from having an account. He was not forced to close it by Pope Francis. You know, Mr. Nuzzi has a lot of imagination… During my twelve years as president, we closed 5,000 accounts at the IOR (i.e. one in four, Editor’s note). Because our statutes are clear: to have one, you must be a clergyman, a seminarian, a religious, an employee or retiree of the Vatican, or even a diplomat. But we had found accounts belonging to Mr. and Mrs. Everyman. They liked to take out cash. This is no longer possible today.

When you arrived, only one bank agreed to work with the IOR, compared to more than thirty today. Why is it important for the IOR that banks work with it?

Without them, you can’t do anything. We have different businesses at IOR: a traditional banking activity of account management, but also management and investment services. We need to work with banks specializing in foreign exchange markets, real estate transactions, etc. To invest money well, you need to diversify risks.

In 2016, Pope Francis seemed to take a step back by letting the Secretariat of State regain control of its accounts. That same year, two members of the IOR slammed the door. Why don’t you resign too, then?

Because maybe I was being a little unreasonable and hopeful. And I did well. We found ourselves in turmoil from 2015 to 2017, because we began to discover lots of things by lifting the right stones. These are the 150 million euros lost that I spoke to you about. We then came under considerable pressure. In the Curia, a 30-page document was circulating against me describing all the alleged wrongdoings in my career… Some from the IOR said: “It’s too much for me. » Others, like me, said to themselves: “We were appointed to solve the problem. » Out of loyalty to Pope Francis, we stayed. I had made a commitment to him. And he never let us down. Even if we sometimes disagreed.

About what?

We wanted to create an investment company with variable capital (Sicav) in Luxembourg. Subject to European regulations, it guaranteed that investments were made in the most transparent, controlled and monitored manner possible. Some people put it into the Holy Father’s head that we wanted to engage in tax speculation. Which was incredible. The Pope asked us not to create this Sicav. We obeyed, backwards.

In 2019, you refused the Secretary of State a loan of 150 million euros to compensate for a colossal loss in the business of a luxury building that it had purchased in London. For what ?

When I arrived in 2014, we decided to no longer issue credits, because the IOR had done so a lot in favor of Catholic structures which never reimbursed them. They considered them gifts. In March 2019, the Secretary of State asked us for a loan of 150 million euros, without giving details. We said: “You are the State, so we are ready to lend you this amount. As long as you are perfectly transparent. » For three months, we asked for documents, without success. We refuse the loan. Pataques. I am summoned to the Secretary of State. “In the name of what do you refuse it? » I am asked. I answer: “In the name of international financial rules. » We get the documents. We immediately understood that there was wrongdoing. We alerted the Pope. He reacted immediately. He slammed his fist on the table.

Did discovering so much immorality among these men serving God shake your faith?

Never. Because I learned, at the Vatican, that priests were like us. They are men. So they have weaknesses. The Church is as much holy as it is human.

Did you expect to discover so much wrongdoing when you arrived in Rome?

I did not expect such a lack of professionalism, respect for rules and such a desire for power among many people.

Have you thought about resigning?

Never. My goal was to be even more resilient than the resistance. I expected to be asked to leave. This was not the case. What I know is that no other function exercised elsewhere, even more comfortable, would have fulfilled me as much as this mission at the Holy See. I had an immense pleasure meeting Pope Francis. He was a great prophet. And he will be recognized as such, I believe it from the bottom of my heart. I had some difficult times with him… But many saints were known pains in the ass!

Is the Vatican’s financial reform complete?

When it comes to finances, nothing is ever finished. You should never say never in banking. We can continue to improve. But we have made good progress.